In my opinion, the changes you advocate, were they to come about, would have harmful, if not disastrous, consequences. By saying so, I don’t at all mean to suggest that bankers today allocate credit flawlessly: far from it. I know that they sometimes fail to get credit to certain credit-worthy applicants, while lending recklessly to less worthy ones; and I understand that the government, besides attempting to correct such errors through regulation, must sometimes compensate for them through its own credit programs aimed at supporting certain groups or industries. I also understand that, owing either to market failures or to the effects of government guarantees and other kinds of regulation, bankers’ profit motive doesn’t necessarily cause them to steer credit to where it does the most good.
But it hardly follows from such truths that a comprehensive Fed takeover of deposit banking would boost “productive economic enterprise, in the long-term interests of the American people.” To claim that it would is, I think, to underestimate both the extent to which the profit motive encourages competing commercial bankers to invest the public’s scarce savings productively, and the difficulties bureaucrats are bound to encounter in their efforts to do the same.
Randy Holcombe asks if we’re too distracted to notice inflation. Here’s his conclusion:
The experience of the 1970s shows us that once started, inflation is difficult and painful to stop. Isn’t it better to prevent inflation in the first place rather than trying to stop it once it’s here? Yet policymakers seem unconcerned. They are saying “Move along; nothing to see here,” but as policymakers tell us this spike in inflation is nothing to worry about, I’m not so optimistic.
The only way to prosecute a widespread victimless, or self-victim, crime is to violate civil liberties on a national scale—intrusive searches and seizures, wiretaps, informants, coerced cooperation, punitive sentences, SWAT teams, property confiscations, predawn raids, and more. Millions of people were arrested and imprisoned. Millions of Americans lost their economic and educational futures. Millions more were turned into felons. And the entire criminal justice system was corrupted, with prosecutors acknowledging that cops often lied about searches and arrests. Judges ignored the Constitution in what was known as the “drug exception” to the Fourth Amendment. All to convict people of hurting themselves, at worst.
Good news on oil spills. (HT David Henderson)
Mr. Woodson changed course, earned a master’s in social work at Penn, and in the early 1960s led neighborhood protests against segregation in West Chester, Pa., as head of a local human-relations council. “The civil-rights movement had its own tea-party movement,” he says, and Mr. Woodson sided with younger activists who favored civil disobedience. But later he clashed with the local civil-rights leadership who favored busing schoolchildren to achieve racial balance. He says he was told,“ ‘Your position is consistent with the Klan and the John Birch Society,’ and I said, ‘I don’t care.’”
Mr. Woodson says he eventually migrated to conservatism not out of an “ideological embrace,” but because conservatives “have strategic interests that are compatible with the poor.” He explains: “If you own a restaurant, you need 100 people who can come in and wait on tables and be trustworthy and reliable.” As an advocate for the poor, “I have 100 people who need jobs to feed their families,” so “you and I have the foundation of a strategically beneficial relationship,” he says. “I don’t care whether you’re racist or not.”
The clue is in the way that government ministers described the scientific opinion to which they were adhering so assiduously. Matt Hancock in one memorable moment actually said that “with science on our side” we would inevitably defeat Covid. What was notable about this fatuous statement was not just the idea that “science” (as opposed to individual scientists) can ever be on anybody’s side, but its startling resemblance to a testament of religious belief.
Just replace the word “science” in that phrase with the word “God”. Our trust in the omnipotence and benevolent protection of scientific authority was put beyond doubt or criticism. “Science” (always referred to as one indivisible thing) was the fount of all certainty and therefore to raise objections to its pronouncements was irresponsible and, by implication, wicked. Only with hindsight, as the Prime Minister is often heard to say, can we see the mistaken calculations that were made and the consequences that arose from them.
Casey Mulligan reports on “Build Back Better’s hidden but hefty penalties on work.” (HT Arnold Kling) A slice:
BBB also creates and expands employer mandates, with compliance enforced with penalties that are proportional to employment, regardless of how rich or poor the employees may be. An example of a proportional employer-penalty scheme is BBB’s new requirement to administer IRA deductions from employee paychecks, with all employees enrolled by default. The penalty for non-compliance is $10 per employee per day (Section 131101), which is similar in magnitude to the ACA’s penalty for failing to provide health insurance.
Section 21004 increases penalties on employers for failure to comply with federal occupational safety, health, and labor-standards requirements. The increases are tenfold or more. For example, the penalty for a large (100+) employer to employ an unvaccinated person is between $50,000 and $700,000 per violation and an additional $70,000 per day. This could amount to $26 million (sic) for every year that each unvaccinated person remains on the payroll.
These and other parts of BBB further reduce employment by suppressing competition in the labor market. Such provisions seek to prevent non-union workplaces, which are almost 95 percent of all private employment, from distinguishing themselves from unionized workplaces. Others put nonunion workplaces at an outright disadvantage. [The labor union movement, of course, is an attempt to restrict or monopolize the supply of labor in order to extract higher employee compensation.] Section 138514 would allow union dues to be deductible from federal income tax, putting about $400 million per year on the union side of the economic scale. Other sections, such as 132002, target “infrastructure grants” to “labor unions and other employers … that pay the prevailing wage.” Section 136401 creates a credit for the purchase of an electric vehicle that “satisfies the domestic assembly qualifications” (that is, unionized).